What is the deficit and the national debt?
The deficit is simply the amount of money the government spends in excess of the money it takes in through taxes, fees, tariffs, etc. According to the most recent projection for 2004, Washington will spend a record $422 billion more than it will take in. The national debt is the total amount the government owes – the sum total of all the deficits piled up over the years, minus the surpluses. Today, the publicly held debt stands at about $4.3 trillion. This number does not include more than $3 trillion that has been “borrowed” from – and is owed to — Social Security, Medicare, and other so-called trust funds. Why the big turnaround from surpluses to deficits in recent years? In the late 1990s, the federal government was racking up budget surpluses for the first time in three decades. Amazingly, we were on track to pile up enough surpluses to totally eliminate the publicly held national debt by 2009. This was crucial to getting the federal government in sound financial shape to meet the
